FCA delays Mifid II policy statement

The FCA has delayed the release of its policy statement on Mifid II until 2017.

The regulator had previously planned to publish a policy statement on the first stage of consultation on Mifid II in the first half of 2016, but says that it will now publish one single policy statement next year.

The initial consultation paper was released at the end of 2015.

In the second consultation on the UK’s implementation of Mifid II, released today, the FCA says: “We previously indicated that we hoped to publish a policy statement on the matters covered by CP15/43 in the first half of 2016. It is now likely we will publish a single policy statement covering all aspects of our implementation in 2017.”

The implementation of Mifid II has been delayed to 3 January 2018 from 3 July 2017, to give firms and regulators more time to make the required changes.

As a result, the FCA says it is “now working to this revised timetable for implementation”. Under the previous timetable, the UK was required to change its laws and regulations by 3 July 2016 to accommodate Mifid II.

In the consultation paper released today, the FCA has also ruled out extending the Mifid II rules on remuneration to a wider group of the industry. It had previously consulted on applying Mifid II’s remuneration rules for sales staff and advisers to non-Mifid II firms.

However, following responses to the initial consultation the regulator has determined that the pay rules will only apply to common platform firms, including Mifid investment firms and dormant account fund operators, but not to collective portfolio management investment firms.

The rules will also apply to article 3 firms and branches of third-country firms.

A statement from the FCA says: “We have not extended the Mifid II remuneration requirements more broadly at this stage, as there are several European initiatives under development that will, or are expected to, specifically address remuneration for particular markets, financial products and types of firms… In particular, the EBA has consulted on guidelines on the remuneration of sales staff that may impact on Mifid and non- Mifid firms.”

“We consider that introducing a broader set of sales staff remuneration provisions at this point would be premature, as it would risk conflicting with other guidance being developed at the European level.”